Fresh out of the studio, Shai Oster, Asia Bureau Chief from The Information, returned for the 5th time in a row for his annual review of China for the year 2022. Shai started the grading of his predictions last year and dive deeper into Sequoia China's current status, and potential tech IPOs of Chinese companies: Bytedance, Ant Financial and Didi. He examined how Apple and Tesla will navigate China amid tensions between China and the United States. Last but not least, he gave his predictions on China tech for the year 2023.
"If you look at over 30 years, China equities have returned zero, basically gone up and gone back down to where it was 30 years ago. It was shocking. So the other thing that is hard to believe, I think we're entering a period of even greater uncertainty now than where we were six months to a year ago. Opening up is a huge gamble. the markets are rallying right now -- 'yay China is opening!' -- but at what cost?" - Shai Oster
- Shai Oster (@beijingscribe, LinkedIn, TheInformation Profile), Asia Bureau Chief from The Information
- Since our last conversation, what have you been up to?
The State of China in 2022
- What did you get right and wrong about your predictions about China for the year 2021?
Sequoia Capital in China
- The most interesting one is on Sequoia Capital, where one of the predictions was why Sequoia Capital will split up from the star Chinese partner [2022 Predictions in The Information]. That did not happen. Based on what you know now, is it just a matter of time or not happening?
- Despite that they still manage to raise $8B in new funds in March 2022, where are they deploying their capital in China now? Is it mainly directed towards the choke point technologies based on the direction under President Xi or the Little Giants program?
- Is Sequoia Capital’s China dependent on their version of the little princelings program similar to how the investment banks such as Goldman Sachs and Morgan Stanley have done in the 2000s to 2020s?
- Why the funds are moving from China to Southeast Asia or India
- We have heard that Hillhouse Capital is now focused on growing outside China and likely focusing on Europe or Southeast Asia. What is the likely impact on China and in these regions of interest?
- GGV has a setup in Southeast Asia but rarely invests in the region as compared to their recent writedown in 2021 on the edutech companies in China. Does that mean that they are just bullish on China? Where are they deploying their capital?
- We see a congregation of talent and money into Southeast Asia from China, for example, Era7, a blockchain gaming is founded by a Chinese tech entrepreneur in the gaming space and was involved in the Chinese gaming scene for a while and is now the best gaming token in Binance exchange, how do you think that the Chinese influence affects Southeast Asia?
Can Chinese tech companies still go public?
- With Beijing easing its big tech crackdown, the Ant Group, Didi and to a certain extent, Bytedance have to wait for IPO clarity. What is holding them from going public? Is it just government intervention?
- With the Chinese economy struggling due to real estate and COVID zero policy and of course, Xi getting his third term, does it mean that these IPOs will eventually happen in 2023?
- Where are they going to list? Is it HKSE or Shanghai Starboard? What are the factors driving the choices of the companies?
Bytedance and their upcoming IPO status
- As Zhang Yiming has moved to Singapore according to The Information, where do you think Bytedance’s priorities will be coming into 2023?
- Will Tik Tok eventually be banned in the US or other parts of the world, given the tensions between China and the US?
- Will it finally IPO in the US?
China's current situation & status of US tech companies in China
- Will Apple and Tesla be forced to leave China given the current tensions between US and China over Taiwan and other human rights issues?
- Are there areas where we should be optimistic about China in the tech startups and venture firms that have driven its rival status to Silicon Valley before the COVID-19 pandemic?
- With the recent protests caused by the populace’s being upset with the COVID-zero policy and the Chinese government starting to ease and throw their local officials under the bus, do you think that the Chinese economy will recover and achieve stability?
Predictions for China in 2023
- What are your predictions for 2023?
- How can my audience find you?